Question

At June 30, 2017, the end of its most recent fiscal year, Flounder Computer Consultants’ post-closing trial balance was as follows:

		Debit		Credit
Cash		$4,390
Accounts receivable		1,010
Supplies		580
Accounts payable				$340
Unearned service revenue				940
Common stock				3,000
Retained earnings				1,700
		$5,980		$5,980

The company underwent a major expansion in July. New staff was hired and more financing was obtained. Flounder conducted the following transactions during July 2017, and adjusts its accounts monthly.

July	1		Purchased equipment, paying $3,600 cash and signing a 2-year note payable for $16,800. The equipment has a 4-year useful life. The note has a 6% interest rate which is payable on the first day of each following month.
	2		Issued 16,800 shares of common stock for $42,000 cash.
	3		Paid $3,000 cash for a 12-month insurance policy effective July 1.
	3		Paid the first 2 (July and August 2017) months’ rent for an annual lease of office space for $3,400 per month.
	6		Paid $3,200 for supplies.
	9		Visited client offices and agreed on the terms of a consulting project. Flounder will bill the client, Connor Productions, on the 20th of each month for services performed.
	10		Collected $1,010 cash on account from Milani Brothers. This client was billed in June when Flounder performed the service.
	13		Performed services for Fitzgerald Enterprises. This client paid $940 in advance last month. All services relating to this payment are now completed.
	14		Paid $340 cash for a utility bill. This related to June utilities that were accrued at the end of June.
	16		Met with a new client, Thunder Bay Technologies. Received $10,100 cash in advance for future services to be performed.
	18		Paid semi-monthly salaries for $9,200.
	20		Performed services worth $23,500 on account and billed customers.
	20		Received a bill for $1,800 for advertising services received during July. The amount is not due until August 15.
	23		Performed the first phase of the project for Thunder Bay Technologies. Recognized $8,400 of revenue from the cash advance received July 16.
	27		Received $12,600 cash from customers billed on July 20.

Adjustment data:

1.		Adjustment of prepaid insurance.
2.		Adjustment of prepaid rent.
3.		Supplies used, $1,050.
4.		Equipment depreciation, $425 per month.
5.		Accrual of interest on note payable.
6.		Salaries for the second half of July, $9,200, to be paid on August 1.
7.		Estimated utilities expense for July, $670 (invoice will be received in August).
8.		Income tax for July, $1,010, will be paid in August.

The chart of accounts for Flounder Computer Consultants contains the following accounts: Cash, Accounts Receivable, Supplies, Prepaid Insurance. Prepaid Rent, Equipment, Accumulated Depreciation—Equipment, Accounts Payable, Notes Payable, Interest Payable, Income Taxes Payable, Salaries and Wages Payable, Unearned Service Revenue, Common Stock, Retained Earnings, Dividends, Income Summary, Service Revenue, Supplies Expense, Depreciation Expense, Insurance Expense, Salaries and Wages Expense, Advertising Expense, Income Tax Expense, Interest Expense, Rent Expense, Supplies Expense, and Utilities Expense.

Please journalize the july transactions

Answer 1

Flounder Computer Consultant’s

General Journal

Date	Account Titles and explanation	Debit	Credit
July 1	Equipment	20,400
	Cash		3,600
	Notes payable		16,800
	(to record purchase of equipmnet by cash and by issuing notes payable)
July 2	Cash	42,000
	Common Stock		42,000
	(to record issue of common stock)
July 3	Prepaid Insurance	3,000
	Cash		3,000
	(to record payment made for insurance)
July 3	Prepaid Rent (3,400 * 2)	6,800
	Cash		6,800
	(to record payment of rent)
July 6	Supplies	3,200
	Cash		3,200
	(to record purchase of supplies)
July 9	No Entry Required
July 10	Cash	1,010
	Accounts receivable		1,010
	(to record receipt of cash from Milani Brothers)
July 13	Unearned service revenue	940
	Service revenue		940
	(to record service performed for which payment already received in last month )
July 14	Accounts payable	340
	Cash		340
	(to record payment made for last month utility bill)
July 16	Cash	10,100
	Unearned Service revenue		10,100
	(to record receipt of cash for future services)
July 18	Salaries and wages expense	9,200
	Cash		9,200
	(to record payment of salaries and wages expense)
July 20	Accounts receivable	23,500
	Service revenue		23,500
	(to record service performed on account)
July 20	Advertising Expense	1,800
	Accounts payable		1,800
	(to record bill received for advertising expense)
July 23	Unearned Service revenue	8,400
	Service revenue		8,400
	(to record service performed for which payment recevied in advance)
July 27	Accounts receivable	12,600
	Cash		12,600
	(to record payment received from customer)
	Adjustment
1	Insurance expense	250
	Prepaid Insurance		250
	(to record insurance expense for the month) (3,000/12)
2	Rent Expense	3,400
	Prepaid rent		3,400
	(to record rent expenses for the month)
3	Supplies expense	1,080
	Supplies		1,080
	(to record supplies used during the month)
4.	Depreciation expense	425
	Accumulated depreciation – equipment		425
	(to record depreciation expense)
5.	Interest expense	84
	Interest payable		84
	(to record interest expenses on notes issued during the month) (16,800 * 6% *1/12)
6.	Salaries and wages expense	9,200
	Salaries and wages payable		9,200
	(to record salary and wages due for the 2nd half)
7.	Utilities expense	670
	Accounts payable		670
	(to record utilites expense on account)
8.	Income tax expense	1,010
	Income taxes payable		1,010
	(to record the income tax liability for the month)

Notes: Apart from above there will be closing entries

1	Service revenue	32,840
	Income summary		32,840
	(to transfer the service revenue balance to income summary)
2	Income summary	26,694
	Salaries and wages expense		18,400
	Advertising expense		1,800
	Rent expense		3,400
	Insurance expense		250
	Utilities expense		670
	Supplies expense		1,080
	Income tax expense		1,010
	Interest expense		84
	(to record closing of all expenses account by transferring to income summary)
3	Income summary	6,146
	Retained Earnings		6,146
	(to record tranfer of net income to retained earnings) (32,840 – 26,694)